Enron but not forgotten: being a former Enron employee doesn't necessarily leave you out in the cold in the business community—not for entrepreneurs with the guts to restake their names on ventures of their own

Entrepreneur, Jan, 2003 by Jason Leopold

A former computer programmer develops an underground sprinkler system that makes it easier for suburbanites to water their lawns. An ex-CFO finds success designing high-end stationery for people who still enjoy writing letters by hand. A one-time broadband salesman partners with a friend to form an investment banking firm. A former marketing executive decides to open an interactive arcade. An ex-Enron sales lead starts a retail energy company.

These are just a handful of the businesses former employees of Enron Corp. have formed since the high-flying energy company imploded in a wave of accounting scandals in October 2001. And if there is one thing the entrepreneurs learned during their tenure at the infamous Houston-based company, it's to think outside the box.

Enron hired the best of the brightest--the top graduates from the most prestigious business schools--and fostered an entrepreneurial work ethic during its heyday. Great ideas, such as creating a market to trade weather derivatives, were quickly turned into businesses run by the employees who dreamed up the concepts.

Some former employees admit that when Enron collapsed, they found it difficult to land similar jobs at other companies because the scandal left them tainted. People in the corporate sector did not want to associate with people who may or may not have played a role in Enron's financial shenanigans.

Other ex-employees say Enron's demise created opportunities to fulfill lifelong dreams of starting businesses from the ground up. In that respect, working for Enron--known for its cutthroat competitive environment--gave these former employees the confidence to be their own bosses. On December 4, 2001, the day Enron filed for bankruptcy and laid off 4,500 employees, John Elder was having lunch with some of Houston's top business executives. "The conclusion was that the most valuable thing at Enron was the employees," Elder says. "We feared Houston would lose major talent, and we wanted to keep these people working in Houston."

So Elder, a principal at Devine & Christopher, a recruitment firm that specializes in the power industry; Mark Slaughter, a private investor and former president and CEO of Reliant Energy Communications; Dan Sudduth, CFO for RoadShowMedia.com and Teligistics; Randy Stilley, a private investor and ex-president of Weatherford International's completion and oil-field services division; and Barry Smotherman, managing partner of Tatum CFO, came up with a plan to help talented former Enron employees get their businesses up and running. The executives started a nonprofit incubator called Resource Alliance Group, a temporary venture showing former Enron employees the ins and outs of running a business. Within just three months, the group helped 25 ex-Enron employees become entrepreneurs, according to Elder.

Resource Alliance Group's first success was Mobius Risk Management, a company that helps large businesses cut energy bills by replacing light bulbs and by scouring the marketplace for low-cost electricity and natural gas contracts. Mobius is headed by two former Enron executives who worked at the company's retail energy services division. Elder says Resource Alliance provided Mobius with mentoring services from experienced business executives, business plan review and development, access to funding sources and office space.

Eric Melvin, Mobius' 39-year-old CEO, says his firm has turned a profit of just under $1 million since opening in March and was hired to evaluate the energy consumption of Harrah's Entertainment, which operates 25 casinos nationwide. Mobius, which started with three employees, now has a staff of 10.

Resource Alliance Group fulfilled its mission and shut down in October, says Elder. But Elder still mentors former Enron employees looking to start businesses. There are plenty of sob stories about the thousands of Enron employees who have been unsuccessful landing new jobs since the company's collapse, and those who were locked out of their 401(k) plans and lost their life savings when Enron's stock plunged to pennies a share. But there are also people like 34-year-old Eric Eden, who started his own lawn-watering business after finding it difficult to secure a new job.

"People I interviewed with would think I was involved in the scandal at Enron," says Eden, who worked at Enron for eight years and did some conceptual drawings for Enron's controversial Dabhol Power Plant in India.

Eden said being judged a "criminal" hurt him emotionally. He was depressed and wasn't sure what to do with his life. Eden tinkered in his garage developing home-improvement appliances. When he decided to start his own line of sprinklers three months after Enron imploded, it was a way to prove to the Houston community that he had nothing to do with Enron's failures. "By starting my own business, I could show how an honest person would run a company," he says.

"After watching Enron do it right, and then do it wrong," Eden says, "my philosophy is, truth persists and cannot be denied or ignored. I believe in Enron's old values that they lost sight of around 1999: 'Respect, Integrity, Communication and Excellence.'"